DEPARTMENT  OF  COMMERCE 

BUREAU  OF  FOREIGN  AND 
DOMESTIC  COMMERCE 


SALES  TERRITORIES 


IN  JAPAN 


f. 


By 


PAUL  P.  STEINTORF 
AMERICAN  TRADE  COMMISSIONER 
TOKYO,  JAPAN 


the  mm 

OF  THE 

. Jk  U.* 


UNITED  STATES 

GOVERNMENT  PRINTING  OFFICE 
WASHINGTON :  1929 


SALES  TERRITORIES  IN  JAPAN 


Japan,  because  of  its  limited  area  and 
high  state  of  commercial  development,  is 
generally  considered  as  a  single  unit  in 
the  placing  of  agencies.  There  are,  how¬ 
ever,  instances  when  it  would  be  of  ad¬ 
vantage  to  divide  the  territory  into  at 
least  two  sales  districts  and,  in  any  case, 
a  thorough  understanding  of  the  trade 
possibilities  of  the  various  industrial  and 
commercial  centers  is  of  importance  in 
selecting  a  sales  representative  for  the 
country. 

Organization  and  Nature  of  Japanese 

Business. 

The  foreign  trade  of  Japan  has  been 
highly  developed  and  is  concentrated  in 
the  hands  of  a  comparatively  small  num¬ 
ber  of  large  trading  companies.  These 
companies  have  built  up  elaborate  organi¬ 
zations  with  branches  throughout  Japan 
and  with  offices  in  all  of  the  more  impor¬ 
tant  commercial  centers  of  the  wTorld. 
The  dominance  of  such  companies  is  a 
result  of  the  peculiar  conditions  govern¬ 
ing  business  in  Japan.  The  greater  part 
of  retail  distribution  is  conducted  on  an 
extremely  small  scale.  In  every  Japanese 
city  there  are  literally  thousands  of  tiny 
shops,  each  of  which  handles  a  single 
specialized  line  or  product.  These  small 
merchants  have  very  limited  credit  facili¬ 
ties,  have  no  knowledge  of  any  language 
except  Japanese,  and  are  totally  unac¬ 
quainted  with  the  elaborate  technique  of 
foreign  trade.  Furthermore,  a  very  con- 

64907—29 - 1  (1) 


2 


siderable  part  of  the  industrial  produc¬ 
tion  of  Japan  is  the  result  of  small  family 
undertakings  which  are  similarly  un¬ 
equipped  for  foreign  trade.  Even  the 
larger  factories  which  have  sufficient  re¬ 
sources  to  undertake  foreign  sales  and 
purchases  find  it  more  profitable  to  turn 
over  their  foreign  business  to  the  special¬ 
ized  trading  companies  than  to  build  up 
the  elaborate  and  expensive  organization 
necessary  for  foreign  trade. 

Importance  of  the  Great  Family  Groups. 

The  large  trading  companies  are  gener¬ 
ally  subsidiary  organizations  of  the  great 
family  groups  which  dominate  present- 
day  Japan.  The  functions  and  organiza¬ 
tion  of  these  are  outlined  in  the  following 
excerpts  from  a  report  by  Consul  J.  W. 
Ballantine,  Tokyo: 

“  The  family  group,  which  took  such  a 
prominent  place  in  the  early  development 
of  Japan,  is  still  a  dominant  factor  in 
Japanese  economic  life.  Its  business  may 
be  described  as  a  gigantic  vertical  trust, 
covering  nearly  every  field  of  economic 
activity.  Generally  control  of  the  enter¬ 
prises  of  such  a  family  group  is  voted  in 
a  holding  company  for  a  specific  purpose. 
The  direction  of  the  activities  of  one  of 
the  largest  of  these  groups,  for  example, 
is  centered  in  an  ordinary  partnership 
capitalized  at  200,000,000  yen  (approxi¬ 
mately  $100,000,000).  This  company  con¬ 
trols  21  other  organizations  with  an  ag¬ 
gregate  paid-up  capital  of  475,245,000  yen 
(approximately  $237,000,000),  whose  ac¬ 
tivities  include  banking,  real  estate,  trust 
business,  warehousing,  mining,  manufac¬ 
turing,  and  transportation. 

“  There  are  about  15  of  these  great 
family  organizations,  of  which  the  Mitsui, 
Iwasaki,  Sumitomo,  Yasuda,  Matsukata, 
Okura,  Suzuki,  Asano,  and  Kuhara  inter- 


3 


• 

ests  are  the  most  important.  These  nine 
families  control  and  operate  144  compa¬ 
nies  with  an  aggregate  paid-up  capital  of 
about  2,360,000,000  yen  (approximately 
$1,180,000,000).  In  addition  they  are  in¬ 
terested  in  a  number  of  other  undertak¬ 
ings  that  are  not  listed  in  available  re¬ 
turns  ;  in  fact,  it  has  been  estimated  that 
the  family  groups  control  not  less  than  30 
per  cent  of  the  total  business  capital  of 
Japan. 

“  The  trading  companies  controlled  by 
these  financial  groups  supply  local  manu¬ 
facturers  with  raw  materials,  finance 
them  during  the  process  of  production, 
and  assemble,  grade,  and  pack  the  prod¬ 
ucts  of  a  large  number  of  households.  In 
the  case  of  imports  they  are  able  to  quote 
laid-down  prices  on  all  varieties  of  foreign 
goods,  and  often  carry  large  stocks  of  im¬ 
ported  goods  ready  for  immediate  deliv¬ 
ery.  They  also  grant  credit  terms  and 
have  service  organizations  for  the  supply 
of  spare  parts,  repairs,  etc.” 

Foreign  Trading  Companies. 

In  addition  there  are  a  number  of  large 
American  and  other  foreign  trading  com¬ 
panies  which  maintain  organizations  simi¬ 
lar  in  size  and  scope.  These  companies 
have  been  established  in  Japan  for  many 
years  and  have  built  up  organizations 
that  are  conversant  with  every  aspect  of 
Japanese  business.  They  formerly  han¬ 
dled  every  kind  of  product  and  engaged 
in  both  export  and  import  business. 
During  recent  years,  however,  there  has 
been  a  tendency  to  concentrate  more  and 
more  on  specialized  import  lines,  such  as 
machinery,  machine  tools,  electrical  equip¬ 
ment,  hardware,  office  specialties,  and 
iron  and  steel  products.  For  commodities 
of  this  sort  they  are  excellent  agents. 


4 


Small  Trading  Companies. 

Other  sales  agencies  are  the  smaller 
Japanese  trading  companies  which  usually 
specialize  in  one  or  more  technical  lines, 
the  commission  merchants,  and  the  indi¬ 
vidual  manufacturer’s  agents.  The  small 
Japanese  companies  are  at  some  disad¬ 
vantage  in  competing  with  the  great  fam¬ 
ily  groups,  but  nevertheless  they  secure  a 
considerable  amount  of  business.  They 
are  particularly  valuable  to  the  American 
firm  which  may,  for  one  reason  or  an¬ 
other,  fail  to  place  its  line  with  one  of  the 
larger  companies,  since  it  might  otherwise 
have  difficulty  in  entering  the  market. 
The  small  companies  (which  are  often 
well  and  favorably  known  as  specialists 
in  certain  lines)  are  frequently  able  to 
give  to  an  agency  the  intensive  personal 
attention  that  is  difficult  to  secure  from 
the  great  trading  company  with  its  mani¬ 
fold  interests. 

The  individual  manufacturer’s  agent  is 
becoming  more  and  more  important  in  the 
import  business  of  Japan.  Generally  he 
handles  only  a  limited  number  of  allied 
products  and  covers  the  market  very  thor¬ 
oughly.  For  such  products  as  hardware, 
tools,  and  sundries  he  makes  an  excellent 
medium  of  sale.  The  difficulty  with  this 
sort  of  agent  is  that  he  is  constantly 
tempted  to  take  on  more  lines  than  he  can 
handle  and  thereby  destroys  his  useful¬ 
ness  as  the  manufacturer’s  personal  rep¬ 
resentative. 

Difficulty  of  Securing  Agents. 

The  concentration  of  Japanese  business 
presents  a  very  real  difficulty  to  the  Amer¬ 
ican  firm  placing  an  agency  in  that  coun¬ 
try.  In  many  lines  the  number  of  poten¬ 
tial  dealers  is  extremely  limited,  and  it 
often  happens  that  all  suitable  agents  are 
already  tied  up.  Furthermore,  there  is  a 


5 


tendency  among  many  of  these  companies 
to  take  on  too  many  lines.  Some  of  the 
smaller  concerns  will  gladly  take  on  any 
line  that  does  not  require  a  guaranty  of 
minimum  sales.  In  certain  lines  there  are 
not  enough  firms  in  the  field  to  care  for 
and  develop  the  business  properly. 

Advantages  and  Disadvantages  of  Japa¬ 
nese  and  Foreign  Agents. 

One  of  the  first  problems  that  must  be 
solved  is  whether  the  agency  is  to  be  given 
to  a  Japanese  or  to  an  American  or  other 
foreign  firm.  From  the  foregoing  para¬ 
graphs  it  should  be  apparent  that  both 
Japanese  and  foreign  firms  have  the  requi¬ 
site  sales  and  handling  facilities,  but 
that  there  is  one  fundamental  difference 
in  their  organization.  This  difference  is 
that  the  Japanese  trading  company  is  pri- 
marily^a  buying^and  selling  agency  for  its 
own  industrial  group,  while  the  foreign 
company’s  sole  function  is  foreign  trade. 
In  order  to  assist  in  the  solution  of  this 
problem  the  outstanding  advantages  and 
disadvantages  of  the  two  classes  of  agents 
are  briefly  summarized  below : 

The  principal  advantages  of  the  Japa¬ 
nese  firm  are  (a)  close  relation  to  indus¬ 
trial  concerns  in  its  own  group ;  ( b )  abil¬ 
ity  to  grant  long-term  credits  to  small  con¬ 
sumers  through  its  own  bank;  (c)  con¬ 
nections  with  small  producers  whereby  it 
acts  as  their  buying  and  selling  agent ; 
(d)  ability  to  carry  stocks  for  immediate 
delivery. 

The  main  objection  advanced  against  the 
Japanese  firm  is  its  tendency  to  concen¬ 
trate  on  sales  to  concerns  within  its  own 
group,  or  to  give  such  companies  a  price 
advantage,  thus  prejudicing  the  product 
with  other  consumers. 

A  further  disadvantage  is  that  nearly 
always  these  companies  handle  a  number 
of  competing  lines  and  merely  quote  on 


6 


all  of  them  when  opportunity  offers.  This 
means  that  an  American  company  may 
lose  business  to  a  competitive  line  handled 
by  its  own  agents.  Another  disadvantage 
is  that  the  large  Japanese  family  organi¬ 
zations  are  extremely  unwilling  to  buy 
from  each  other. 

The  principal  advantages  of  the  foreign 
firms  are  (a)  independent  sales  facilities 
whereby  they  can  cover  the  market  fully 
and  not  limit  sales  to  a  single  financial 
group;  (ft)  a  highly  developed,  specialized 
sales  force;  (c)  concentration  of  all  re¬ 
sources  on  sales  alone. 

The  most  important  disadvantage  is  the 
tendency  of  each  financial  group  to  pur¬ 
chase  industrial  equipment  and  supplies 
from  its  own  trading  company.  In  some 
cases  this  may  be  serious ;  in  others  it  is  a 
neglibile  factor,  since  the  industrial  con¬ 
cerns  in  a  financial  group  invariably  have 
considerable  latitude  with  respect  to  pur¬ 
chases  and  often  buy  lines  which  are  di¬ 
rectly  competitive  with  those  handled  by 
their  associated  trading  companies.  In 
other  words,  the  engineer  and  purchasing 
agents  can  and  do  buy  from  independent 
importers  whenever  they  consider  it  to 
their  advantage.  However,  loyalty  to  the 
parent  organization  will  generally  prevent 
such  industrial  concerns  from  purchasing 
products  handled  by  a  competing  family 
group.  The  foreign  companies  are  some¬ 
times  at  a  disadvantage  in  financing  pur¬ 
chases  by  the  small  retail  establishments 
since  they  can  not  undertake  to  grant  ex¬ 
tended  credits  to  as  great  an  extent  as  the 
Japanese  financial  groups.  This  may  or 
may  not  be  an  important  disadvantage, 
depending  entirely  upon  the  kind  of  pro¬ 
duction  and  the  class  of  purchasers. 

In  selecting  one  of  the  Japanese  finan¬ 
cial  groups  as  an  agent  it  is  essential  to 
take  into  consideration  the  industrial  con- 


7 


cerns  under  its  control,  since  each  of  these 
companies  specializes  to  some  extent  on 
certain  industries.  For  example,  one  of 
these  companies  owns  or  controls  a  num¬ 
ber  of  paper  mills.  This  company  would 
be  the  logical  agent  for  American  manu¬ 
facturers  of  paper-mill  machinery,  equip¬ 
ment,  or  supplies  and  it  would  be  unwise 
to  give  the  agency  rights  to  one  of  the 
other  Japanese  groups.  On  the  other 
hand,  there  would  be  no  serious  disadvan¬ 
tage  in  giving  the  line  to  a  foreign  firm 
or  one  of  the  smaller  independent  Japa¬ 
nese  importers,  provided  the  financial 
group  concerned  did  not  have  a  practical 
monopoly  of  the  industry  in  question. 

In  appointing  regional  distributors  it  is 
essential  to  have  a  definite  understanding 
with  respect  to  Government  business.  The 
bulk  of  the  Government  purchases  are 
actually  made  in  Tokyo,  but  in  many  cases 
the  business  will  have  originated  else¬ 
where  and  may  have  been  developed  by  an 
agent  in  any  outlying  district.  In  such 
cases  it  is  obviously  unfair  to  let  the 
Tokyo  agent  reap  the  benefit  of  this  pre¬ 
liminary  work,  but  it  is  generally  essen¬ 
tial  that  the  final  negotiations  be  con¬ 
ducted  by  the  Tokyo  representative. 
Probably  the  easiest  way  to  obviate  dis¬ 
putes  would  be  to  divide  the  profits  of 
commissions  on  such  business  between  the 
Tokyo  and  the  regional  distributor. 

Generally  there  are  innumerable  dis¬ 
putes  in  regard  to  territorial  credits,  since 
regional  agents  almost  invariably  spend 
much  time  and  effort  in  trying  to  develop 
business  outside  their  territory.  It  is  gen¬ 
erally  wise  to  obviate  such  difficulties  by 
an  arrangement  whereby  the  local  agent 
is  entitled  to  commissions  on  all  non-Gov- 
ernment  sales  in  his  territory,  regardless 
of  who  may  have  actually  consummated 
the  business. 

64907—29 - 2 


8 


10 


In  general,  it  may  be  observed  that  if 
the  American  exporter  can  secure  as  his 
representative  one  of  the  larger  trading 
companies,  either  Japanese  or  foreign,  he 
need  have  no  hesitancy  in  granting  it  the 
agency  for  all  Japan.  This,  however,  is 
not  always  possible.  These  companies 
are  often  already  tied  up  with  competing 
lines,  and  it  is  then  necessary  to  seek 
other  channels.  The  only  alternative! 
are  to  establish  a  branch  office  or  to  se¬ 
lect  an  agent  from  among  the  smaller 
trading  companies  or  manufacturers’ 
agents.  Since  the  former  alternative  is 
rarely  practicable  except  for  products  for 
which  there  is  a  large  and  constant  de¬ 
mand,  it  is  usually  necessary  to  enter  the 
market  by  the  latter  method.  In  some 
cases  the  smaller  companies  make  suitable 
agents  for  the  entire  country,  but  gener¬ 
ally  it  will  be  found  that  division  of  the 
country  into  two  or  more  sales  districts 
will  secure  a  larger  distribution  and  will 
assure  the  manufacturer  that  no  impor¬ 
tant  sales  areas  are  being  neglected. 

Principal  Sales  Districts. 

Japan  proper  is  divided  into  two  great 
natural  geographic  districts  with  a  num¬ 
ber  of  subsidiary  areas  of  minor  impor¬ 
tance.  The  first  is  the  great  alluvial 
plain,  known  as  the  Kwanto,  in  which 
Tokyo  and  Yokohama  are  situated.  The 
second  is  the  Kwansai  plain  in  the  south¬ 
ern  part  of  the  main  island,  which  con¬ 
tains  the  important  cities  of  Kobe,  Osaka, 
and  Kyoto.  These  twTo  districts  are  the 
only  ones  in  which  direct  foreign  trade  is 
of  much  importance.  The  smaller  cities 
are  accustomed  to  making  their  purchases 
of  imported  goods  through  the  trading 
companies  located  in  one  of  the  principal 
cities  enumerated  above,  either  direct  or 
through  local  branch  offices.  It  is  rarely 


11 


necessary  to  appoint  individual  agents  in 
these  cities,  although  it  is  essential  to 
know  that  the  prospective  agent  covers 
them  either  by  branch  offices  or  by  travel¬ 
ing  salesmen. 

An  allocation  of  territory  usually  fol¬ 
lows  the  natural  geographic  division,  an 
agent  in  Tokyo  being  selected  for  the 
Kwanto  and  one  in  either  Kobe  or  Osaka 
for  the  Kwansai  district.  An  equitable 
distribution  would  be  to  grant  to  the 
Tokyo  agent  all  territory  lying  to  the  east 
of  a  line  drawn  through  Nagoya  (exclud¬ 
ing  the  city  of  Nagoya  and  immediate  sur¬ 
rounding  territory).  This  would  give  the 
Tokyo  or  Kwanto  agent  all  of  the  north¬ 
ern  part  of  the  main  island  and  the 
northern  island  of  Hokkaido.  The  Kwan¬ 
sai  agent  would  be  given  the  remainder 
of  Japan  proper,  which  includes  the  south¬ 
ern  portion  of  the  main  island  and  the 
islands  of  Shikoku  and  Kyushu.  This  di¬ 
vision,  however,  is  of  necessity  somewhat 
arbitrary,  since  the  allocation  of  territory 
must  hinge  on  the  relative  importance  of 
the  two  agents  chosen  and  on  their  ability 
to  cover  the  territory  adequately. 

The  Kwanto  District. 

Tokyo  is  easily  the  outstanding  city  in 
Japan  from  the  viewpoint  of  the  American 
exporter.  It  is  the  capital,  and  all  pur¬ 
chases  for  the  Government  departments — 
an  important  feature  of  Japanese  trade — 
are  made  there.  Furthermore,  it  is  the 
financial  center  of  the  country.  Nearly 
all  of  the  great  trading  firms  have  their 
head  offices  in  Tokyo,  and  every  buying 
and  selling  agency  in  the  country  is  rep¬ 
resented.  To  a  very  large  extent  it  is  the 
trade  center  of  the  entire  country. 

Yokohama  serves  as  the  port  for  Tokyo, 
which  is  only  20  miles  distant.  It  is  also 
the  center  of  the  export  trade  in  silk  and 


12 


an  important  collection  and  distribution 
point  for  the  Kwanto.  Prior  to  the  earth¬ 
quake  of  1923  many  of  the  foreign-trading 
companies  had  their  head  offices  in  Yoko¬ 
hama,  but  now  most  of  them  have  moved 
to  Tokyo.  Commercially  it  is  a  part  of 
the  Tokyo  district. 

Hakodate  and  Muroran  are  the  leading 
ports  of  the  island  of  Hokkaido.  Their 
direct  imports  from  the  United  States  are 
negligible,  but  they  are  destined  to  be 
increasingly  important  as  the  natural  re¬ 
sources  of  Hokkaido  are  developed. 

The  Kwansai  District. 

Osaka  is  the  chief  industrial  center  in 
Japan  and  is  the  largest  city  in  the  Kwan¬ 
sai  district.  As  a  market  for  machinery 
and  industrial  products  it  excels  all  other 
Japanese  cities.  It  is,  however,  second¬ 
ary  to  Tokyo  as  an  import  center. 

Kot)e  is  the  leading  import  port  of 
Japan  and  serves  as  the  port  of  entry  for 
Osaka,  some  20  miles  distant.  It  is  also 
important  as  an  export  center  of  cotton 
goods  and  other  Osaka  goods  destined  for 
China  and  other  oriental  markets. 

Kyoto,  the  ancient  capital  of  Japan  and 
center  of  artistic  and  cultural  life,  is  of 
secondary  importance  to  the  importer.  It 
is  not  a  commercial  city,  but  nevertheless 
consumes  a  very  considerable  quantity  of 
imported  goods  and  must  be  considered  in 
the  allocation  of  sales  territory. 

Nagoya  is  a  prominent  industrial  and 
commercial  city  about  119  miles  northeast 
of  Osaka  and  235  miles  southwest  of 
Tokyo.  It  is  a  relatively  minor  import 
market,  since  most  of  its  purchases  are 
made  through  trading  companies  in 
Osaka,  Kobe,  or  Tokyo. 

Moji  and  Shimonoseki  are  twin  cities 
situated  on  the  opposite  sides  of  the  Shi¬ 
monoseki  Straits,  which  separate  the 


13 


island  of  Kyushu  from  the  main  island  of 
Hondo.  These  two  cities  are  important 
collection  and  distribution  centers,  but 
engage  in  very  little  direct  import  trade 
with  the  United  States. 

Nagasaki,  at  one  time  the  leading  port 
of  Japan,  is  now  relatively  insignificant, 
although  it  still  serves  as  the  port  and 
commercial  center  for  a  considerable  part 
of  the  island  of  Kyushu. 

Agents  for  Japan’s  Colonies. 

Japan’s  colonial  possessions,  namely, 
Taiwan  (Formosa)  and  Chosen  (Korea), 
need  not  be  considered  separately,  pro¬ 
vided  the  American  manufacturer  secures 
as  an  agent  one  of  the  large  general  trad¬ 
ing  companies  with  headquarters  in  Japan 
proper.  However,  if  he  decides  to  give 
the  agency  for  Japan  proper  to  one  or 
more  smaller  companies,  he  will  then  have 
to  appoint  individual  agents  for  each  of 
these  territories. 

Taiwan,  commercially,  is  to  a  very  great 
extent  subsidiary  to  Japan  proper,  and  it 
is  quite  often  possible  to  allocate  the  ter¬ 
ritory  to  the  Kobe  representative,  pro¬ 
vided,  of  course,  that  he  has  some  direct 
sales  representation  on  the  island,  though 
this  does  not  necessarily  mean  a  branch 
office.  In  the  cases  where  it  is  found 
necessary  to  treat  the  island  as  a  separate 
sales  district  the  manufacturer  must 
choose  from  a  rather  restricted  list  of 
small  Japanese  and  Chinese  trading  com¬ 
panies.  The  only  cities  that  he  need  con¬ 
sider  are  Keelung,  the  principal  port,  and 
Taihoku,  the  largest  city  and  seat  of  gov¬ 
ernment. 

Chosen  has  a  somewhat  greater  com¬ 
mercial  importance  and  it  is  essential  to 
see  that  the  agent  who  is  given  the  Japa¬ 
nese  Empire  as  a  sales  territory  is  ade¬ 
quately  represented  there.  In  the  case  of 
separate  treatment  an  agent  must  be  se- 


14 


lected  from  the  Japanese  and  foreign 
trading  firms,  of  which  there  are  quite  a 
number.  It  is  difficult  to  lay  down  any 
definite  rules,  since  the  kind  of  agent  se¬ 
lected  will  depend  entirely  on  the  product 
to  be  sold.  In  any  case,  it  will  not  be 
necessary  to  split  the  colony  into  sales  dis¬ 
tricts.  The  principal  commercial  centers 
are  Fusan — the  port  of  entry  from  Japan, 
which  handles  about  two-thirds  of  the 
foreign  trade  of  Chosen — and  Keijo,  or 
Seoul,  the  capital  and  largest  city.  Other 
cities  are  Jinsen  (Chemulpo),  the  sea  gate 
to  Keijo,  and  Heijo  (Pingyang),  where 
the  Pingyang  collieries  are  located. 

Agents  for  Kwantung  Leased  Territory. 

Japan’s  leased  territory  in  Manchuria — 
consisting  of  the  Kwantung  Peninsula  and 
the  zone  along  the  line  of  the  South  Man¬ 
churia  Railway  from  Dairen  and  Antung 
to  Mukden  and  thence  north  to  Chang¬ 
chun — is  commercially  under  the  direction 
of  Japanese  interests  and  should  there¬ 
fore  be  taken  into  consideration  in  the 
allocation  of  Japanese  sales  districts. 
Dairen  is  the  gateway  to  the  three  eastern 
Provinces  of  China  which  constitute  Man¬ 
churia,  a  rich  and  productive  area  des¬ 
tined  to  become  of  great  commercial  im¬ 
portance.  All  the  great  Japanese  trading 
companies  maintain  branches  in  both 
Dairen  and  Mukden ;  some  of  them  have 
subsidiary  branches  in  Changchun  and 
Antung.  Dairen,  from  the  viewpoint  of 
the  American  exporter,  is  almost  as  much 
a  Japanese  city  as  Tokyo,  and  if  the  agent 
of  the  American  manufacturer  or  exporter 
is  one  of  the  large  Japanese  trading  com¬ 
panies,  it  is  as  well  equipped  to  look  after 
his  interests  in  the  one  city  as  in  the 
other.  A  good  many  of  the  foreign  com¬ 
panies  established  in  Japan  have  branches 
in  Dairen  and  Mukden  to  foster  their 
interests  there. 


15 


There  are,  however,  American  firms  and 
others  located  in  north  and  south  Man¬ 
churia  which  have  relations  with  each 
other  but  no  head  or  auxiliary  houses  in 
Japan.  On  account  of  their  direct  con¬ 
tacts  with  the  Chinese  population,  which 
is  overwhelmingly  predominant,  it  may  be 
advisable,  in  some  lines  especially,  that 
agencies  be  placed  with  foreign  companies 
functioning  independently  in  Manchuria, 
or  in  connection  with  their  organizations 
in  China,  rather  than  with  organizations 
direct  from  Japan.  These  (non- Japanese) 
companies  operating  independently  in 
Manchuria,  or  in  conjunction  with  other 
large  organizations  throughout  China, 
very  frequently  have  a  network  of  sub¬ 
sidiary  agencies  scattered  throughout  the 
country ;  and  because  of  these  numerous 
and  direct  contacts  with  the  Chinese  popu¬ 
lation  they  are  often  able  to  give  the  for¬ 
eign  manufacturer  or  exporter  a  wider 
distribution.  Foreign  as  well  as  Japanese 
commercial  companies  operating  in  Man¬ 
churia  enjoy  the  extraterritorial  status 
assured  to  foreign  firms  by  treaty  in  other 
parts  of  China  and  are  therefore  always  * 
under  the  supervision  of  the  official  repre¬ 
sentatives  of  the  nationalities  to  which 
they  belong.  This  is  frequently  a  matter 
of  importance  in  the  event  of  controversy. 

Conclusion. 

In  general,  it  is  believed  that  where 
the  facilities  of  one  of  the  great  Japanese 
or  foreign  trading  companies  can  be  ob¬ 
tained,  the  simplest  and  most  productive 
course  is  to  allocate  the  agency  for  the 
entire  Japanese  Empire  with  it,  and  wdien 
it  is  not  possible  to  operate  through  one 
of  the  large  companies,  it  is  probable  that 
a  division  of  the  territory  into  four  or  five 
districts  (i.  e.,  Kwansai  and  Kwanto  in 
Japan  proper,  Taiwan,  Chosen,  and  Kwan- 


16 


tung  leased  territory)  will  secure  the  best 
distribution. 

Table  of  Distances. 

Distances  in  miles  from  Tokyo  to  the 
leading  colonial  cities  are  as  follows : 
Fusan  (Chosen),  828;  Seoul  (Chosen), 
1,108;  Dairen  (Manchuria),  1,132; 
Taihoku  (Taiwan),  1,386. 

Distances  (also  in  miles),  between  the 
leading  commercial  cities  of  Japan  proper 
are  shown  in  the  table  below  : 


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